- Case
- PICO CAPITAL PRIVATE LIMITED v. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 8(2)(1) (Bombay High Court, 07-01-2025)
- Law
- Income-tax Act, Principles of Natural Justice.
Facts: Pico Capital Private Limited challenged an assessment order dated 26 March 2024 and a notice dated 31 March 2023, disposing of objections under Section 148A(d) of the Income Tax Act, 1961. The petitioner had explicitly requested a personal hearing in reply to the show cause notice, which was denied. The reason given by the respondents was that the petitioner would have nothing further to add to their already filed reply.
Procedural Posture: The case came before the High Court of Judicature at Bombay via a writ petition, challenging the assessment order. Although the assessment order was appealable, the High Court entertained the petition due to the complete failure of natural justice.
Issue: Was the denial of a personal hearing to the petitioner, who explicitly requested it, a breach of the principles of natural justice, thereby invalidating the assessment order?
Holding: Yes, the denial of a personal hearing was a breach of the principles of natural justice, and the assessment order was set aside.
Reasoning: The Court held that if the law requires a personal hearing, it should not be denied on the grounds that the petitioner has nothing further to add. The petitioner must be allowed to convince the Assessing Officer of the merits of their case. The court cited John v. Rees, emphasizing the importance of observing the rules of natural justice and providing an opportunity to be heard. The Court also referred to Circular No.F.No.225/97/2021/ITA-II dated 6 September 2021, which provides that personal hearings should generally be allowed. The Court set aside the assessment order and remanded the matter back to the respondent to dispose of the show cause notice after granting the petitioner a personal hearing.
